Stocks ended down Friday after a strong opening as investors worked through a series of quarterly earnings reports and mixed messages from Fed officials on the likely size of an expected rate cut.
The Dow Jones Industrial Average sank 68 points, or 0.25%, to 27,154.20. The S&P 500 was down 0.62%, at 2,976.61, while the Nasdaq fell 0.74% to 8,146.49.
Stocks started the day in the green zone following up on momentum from late Thursday when New York Fed President John Williams said at a conference that rate setters were better off taking "preventative measures than to wait for disaster to unfold" when considering the level of policy support needed for a slowing economy.
"When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress," he added.
Fed Vice President Richard Clarida echoed Williams's proactive approach, telling Fox Business Network that you "don't have to wait until things get bad to have a dramatic series of rate cuts."
A New York Fed spokesperson, however, attempted to walk back Williams's remarks late on Thursday, calling his views "academic" and "not about potential policy actions."
Williams's office soon followed with a similar statement, saying his comments were only in regard to an academic study and shouldn't be construed as a current policy intention.
President Donald Trump made his feelings known about Williams's comments Friday via Twitter, saying that he liked Williams's "first statement much better than his second" and said the Fed "must stop with the crazy quantitative tightening."
I like New York Fed President John Williams first statement much better than his second. His first statement is 100% correct in that the Fed "raised" far too fast & too early. Also must stop with the crazy quantitative tightening. We are in a World competition, & winning big,...
- Donald J. Trump (@realDonaldTrump) July 19, 2019Williams did not say that the Fed raised "far too fast & too early."
Dom Catrambone, CEO of Whitford Asset Management and manager of the Volshares Large-Cap ETF, said that any other time the Fed would increase rates.
"As the economic data has shown to-date, consumer confidence is high," he said, "with strong retail numbers released this week, overall positive growth for the last quarter and the best job market in over fifty years. So why consider a rate cut? The answer may lie in the uncertainty that is lingering inside the U.S. and global economies."
Catrambone said that such factors as the trade war between the United States and China instantaneously influence global economics and has the Fed constantly on the defensive to act quickly to stabilize monetary policies.
"Most likely what (Fed Chair) Jerome Powell and the Fed are thinking is that lowering rates may help, or at least do no harm, compared to not lowering rates - something Wall Street has already built into the markets," he said. "Keeping the waters calm currently may be the most prudent move the Fed can make."
Shares of Microsoft hit a record shortly after the market opened, ending slightly up at $136.62 a share, as the software giant posted stronger-than-expected fourth quarter earnings driven largely by its fast-expanding cloud computing business. Microsoft is Real Money's Stock of the Day. Microsoft Gains on Solid Results and Guidance: 10 Key TakeawaysBoeing climbed 4.5% to $377.29 after the Chicago aerospace giant said it would book a $4.9 billion second-quarter charge linked to the extended grounding of its flagship 737 MAX aircraft.
American Express (AXP) shares dipped 2.8% to $124.82 even though the financial services company posted stronger-than-expected second-quarter earnings Friday and maintained its full-year profit guidance.
Shares of BlackRock (BLK) slipped slightly to $472.66 after the largest U.S. money manager missed Wall Street's second-quarter earnings expectations.
J.C. Penney (JCP) shares were down 16.6% to 90 cents as the company has hired advisers to explore debt restructuring options, Reuters reported citing sources.
In the energy sector, global oil prices, which have been active all week amid mixed signals on demand, rising Middle East tensions and supply disruptions in the Gulf of Mexico, were up Friday after Iran's Revolutionary Guards said they had seized a British oil tanker, the Stena Impero, when it headed into Iranian waters.
The U.S. Navy on Thursday said that it had shot down and destroyed an Iranian drone that had threatened an American vessel in the Strait of Hormuz. Iran denied that any of its drones have been shot down and suggested the U.S. may have shot down its own equipment.
Brent crude contracts for September delivery, the global benchmark, were up $1.19 to $63.12 per barrel, while West Texas Intermediate contracts for August, which are more tightly linked to U.S. gas prices, were up 80 cents at $56.22 per barrel.
In economic news, consumer sentiment remained largely positive in July, rising to 98.4 from 98.2 last month, according to the he University of Michigan's preliminary reading. Economists had been looking for a reading of 98.5.
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